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\n\n\n\n- \n \r\n\t\t\t\t\t Indian Submissions in WTO\t\t\t\t\t\n\n\n \n\n\n
- \n \r\n\r\n\t\t\t\t\t Trade-Related Aspects of Intellectual Property Rights(TRIPS)\t\t\t\t\t\n\n\n \n\n\n
- Submission by the AfricaN Group, Barbados, Bolivia, Brazil, cuba, Dominican Republic, Ecuador, Honduras, India, Indonesia, Jamaica, Pakistan, Paraguay, Philippines, Peru, Sri Lanka, Thailand and Venezuela\t\t\t\t\t\n \n
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\n\n\tSubmission by the AfricaN Group, Barbados, Bolivia, Brazil, cuba, Dominican Republic, Ecuador, Honduras, India, Indonesia, Jamaica, Pakistan, Paraguay, Philippines, Peru, Sri Lanka, Thailand and Venezuela
\n\n IP/C/W/296 29 June 2001\n
\nCouncil for Trade-Related Aspects of Intellectual Property Rights (01-3268)
\nOriginal: English
By means of a communication, dated 19 June 2001, the following text has been received from the Permanent Mission of Brazil on behalf of the African Group, Barbados, Bolivia, Brazil, Cuba, Dominican Republic, Ecuador, Honduras, India, Indonesia, Jamaica, Pakistan, Paraguay, Philippines, Peru, Sri Lanka, Thailand and Venezuela with the request that it be circulated as an unrestricted Council document.
\n\n Trips and Public health\n
\n\n Summary\n
\n- \n
- The special discussion on TRIPS and Public Health at the TRIPS Council is not a one-off event. It should be part of a process to ensure that the TRIPS Agreement does not in any way undermine the legitimate right of WTO Members to formulate their own public health policies and implement them by adopting measures to protect public health. \n
- The TRIPS Agreement allows for implementation of public health policy measures. Nevertheless, where the provisions of the Agreement may be considered insufficient to protect public health, Members may wish to bring further proposals for modifications in the Agreement, with a view to increase its flexibility. \n
- Nothing in the TRIPS Agreement should prevent Members from taking measures to protect public health. \n
- Each provision of the TRIPS Agreement should be read in light of the objectives and principles set forth in Articles 7 and 8. The protection of intellectual property rights, in particular patent protection, should encourage the development of new medicines and the international transfer of technology to promote the development of manufacturing capacities of pharmaceuticals, without restraining policies on access to medications. \n
- Compulsory licences are an essential tool for governments to carry out public health policies, as they may facilitate access to medicines through prevention of abuses of rights, encouragement of domestic capacities for manufacturing pharmaceuticals and in cases of national emergency or other circumstances of extreme urgency, or of public non-commercial use. Nothing in the TRIPS Agreement limits the grounds for governments to issue compulsory licences. \n
- Parallel imports can also be an important tool to ensure adequate access to medications. In light of Article 6 of the TRIPS Agreement, the TRIPS Council should confirm the unconditional right of Members to determine the way in which exhaustion of rights regimes are applied in their jurisdiction. \n
- While we favour discussions on differential pricing arrangements, they are only part of a broader set of initiatives to improve access to medications. Differential pricing should in no way be used to limit the flexibility of the TRIPS Agreement in any of its provisions. Given that the issue is not within the sphere of discussions on intellectual property rights, it should not be covered by the TRIPS Council, but rather by other intergovernmental international organizations, such as the World Health Organization. \n
- Other issues related to the provisions of the TRIPS Agreement also deserve further discussion by Members, such as the extension of transitional arrangements. \n
- inally, the Ministerial Conference in Qatar in November 2001 will be the best opportunity to take such action as will ensure that the TRIPS Agreement does not in any way undermine the legitimate right of WTO Members to formulate their own public health policies and implement them by adopting measures to protect public health. \n
\n Introduction\n
\n- \n
- At the TRIPS Council meeting held on 2 to 6 April 2001, Members agreed to hold a special session of the TRIPS Council in June 2001 to initiate discussions on the interpretation and application of the relevant provisions of the TRIPS Agreement with a view to clarifying the flexibilities to which Members are entitled to and, in particular, to establish the relationship between intellectual property rights (IPRs) and access to medicines. The decision to hold such a discussion was based on a proposal by the African Group, which was supported by virtually all Members. \n
- The main purpose of this paper is to address the relationship between the TRIPS Agreement and public health. Clearly, the World Trade Organization has no mandate to establish public health policies, which should remain within the mandate of other international bodies, such as the World Health Organization. In this sense, the purpose of the discussions on TRIPS and public health at the TRIPS Council should be to ensure that the TRIPS Agreement does not undermine the implementation of public health policies by Members. \n
- The special discussion on TRIPS and public health at the TRIPS Council is not a one-off event. It should be part of a process to ensure that the TRIPS Agreement does not in any way undermine the legitimate right of WTO Members to formulate their own public health policies and implement them by adopting measures to protect public health. \n
- Our commitment to the TRIPS Agreement stems from our expectation that the protection and enforcement of IPRs, in accordance with the objectives of the Agreement (Article 7), “should contribute to the promotion of technological innovation and to the transfer and dissemination of technology, to the mutual advantage of producers and users of technological knowledge and in a manner conducive to social and economic welfare, and to a balance of rights and obligations”. With a view to fulfilling these objectives, we remain committed to implementation of the TRIPS Agreement based on its proper and flexible interpretation and in accordance with the objectives and principles contained in Articles 7 and 8 of the Agreement. \n
- Some provisions of the TRIPS Agreement may elicit different interpretations. This “room to manoeuvre” served the purpose of accommodating different positions held by Members at the time of negotiations of the Agreement. We strongly believe that nothing in the TRIPS Agreement reduces the range of options available to Governments to promote and protect public health, as well as other overarching public policy objectives. The TRIPS Council must confirm this understanding as early as possible. \n
- The issues raised in this paper are not exhaustive. According to the developments in this exercise of interpreting the TRIPS Agreement, we may wish to bring (collectively or individually) further clarifications and complements to this document. All elements and views presented in the document are without prejudice to individual positions that Members may take in further discussions in the TRIPS Council or in other WTO bodies, including dispute settlement procedures. \n
\n Context of the discussions on TRIPs and public health\n
\n- \n
- Although the TRIPS Council has only recently begun to discuss the implications of the TRIPS Agreement to public health, other intergovernmental organizations and civil society have already been paying careful attention to such implications for some time. \n
- A number of recent events have illustrated the effects of the TRIPS Agreement on public health policies. In this respect, one landmark case was the lawsuit brought by a Pharmaceutical Industry Association and 39 of its affiliate pharmaceutical companies against the Government of South Africa regarding provisions of its Medicines and Related Substances Control Amendment Act. The South Africa Government’s resolve on the correctness of its policy, serious weakness in the technical arguments of the plaintiffs together with strong pressure from domestic and international public opinion resulted in the withdrawal of these companies from the case. The case also signalled that public opinion is seriously concerned that intellectual property rights may be interpreted and implemented in a manner that runs counter to the promotion of public health policies by governments. \n
- Further, in April 2001, the 57th Session of the United Nations Commission on Human Rights adopted Resolution 2001/33, on “Access to Medication in the Context of Pandemics such as HIV/AIDS”, which was approved by the overwhelming majority of its Members. The Resolution recognizes access to medicines in the context of pandemics as an essential human right. The United Nations Commission on Human Rights, in this Resolution, “calls upon States, at the national level, on a non discriminatory basis for all, to: (i) refrain from taking measures which would deny or limit equal access for all persons to preventive, curative or palliative pharmaceuticals or medical technologies used to treat pandemics such as HIV/AIDS or the most common opportunistic infections that accompany them; (ii) adopt legislation or other measures, in accordance with applicable international law, including international agreements acceded to, to safeguard access to such preventive, curative or palliative pharmaceuticals or medical technologies from any limitations by third parties; (iii) adopt all appropriate positive measures to the maximum of the resources allocated for this purpose so as to promote effective access to such preventive, curative or palliative pharmaceuticals or medical technologies”. Among other actions, the Human Rights Commission “also calls upon States, at the international level, to take steps individually and/or through international co-operation, in accordance with applicable international law, including international agreements acceded to, such as: (i) to facilitate access in other countries to essential preventive, curative or palliative pharmaceuticals or medical technologies used to treat pandemics such as HIV/AIDS or the most common opportunistic infections that accompany them wherever possible as well as to extend the necessary cooperation wherever possible, especially in times of emergency; and (ii) to ensure that their actions as members of international organizations take due account of the right of everyone to the enjoyment of the highest attainable standard of physical and mental health and that the application of international agreements is supportive of public health policies which promote broad access to safe, efficient and affordable preventive, curative or palliative pharmaceuticals and medical technologies”. \n
- In 21 May 2001, the 54th World Health Assembly also approved two Resolutions that are relevant for the discussions at the TRIPS Council: the Resolution “Scaling Up the Response to HIV/AIDS” and the Resolution “WHO Medicines Strategy”. In the Resolution “Scaling Up the Response to HIV/AIDS” (WHA54.10), the World Health Assembly recalls “efforts to make drugs available at lower prices for those in need” and urges Members “in order to increase access to medicines, to cooperate constructively in strengthening pharmaceutical policies and practices, including those applicable to generic drugs and intellectual property regimes, in order further to promote innovation and the development of domestic industries consistent with national law”. \n
- The Resolution “WHO Medicines Strategy” (WHA54.11) also contains several important elements for discussion at the TRIPS Council. The World Health Assembly notes that “the impact of international trade agreements on access to, or local manufacturing of, essential drugs and on the development of new drugs needs to be further evaluated”. Further, the Resolution urges Members to “cooperate with respect to resolution 2001/33 of the United Nations Commission on Human Rights” and “in order to increase access to medicines, and in accordance with the health needs of people, especially those who can least afford the costs, and recognizing the efforts of Members to expand access to drugs and promote domestic industry, cooperate constructively in strengthening pharmaceutical policies and practices, including those applicable to generic drugs and intellectual property regimes in order further to promote innovation and the development of domestic industries, consistent with applicable international law”. The WHA also requests the Director-General “to continue and to enhance efforts to study and report on existing and future health implications of international trade agreements in close cooperation with relevant intergovernmental organizations”. \n
- In June 2001, the General Assembly of the United Nations will hold a Special Session on HIV/AIDS. The TRIPS Council could take into consideration some of the important conclusions of the Report of the Secretary General to this meeting (document A/55/779, issued on 16 February 2001). In paragraph 48, for instance, the UN Secretary General notes that “[g]lobally trade policy provisions need to be used more effectively to increase access to care. The availability of low-cost generic drugs needs to be expanded, in accordance with national laws and international trade agreements and with a guarantee of their quality. The relevance of compulsory licensing and the development of national manufacturing capacities need further expansion”. In paragraph 101, the Report also remarks that “[w]e need to find ways of more effectively using trade policy provisions, such as compulsory licensing or parallel importation, to increase access to care. The availability of low-cost generic drugs needs to be expanded, in accordance with national laws and international trade agreements and with guarantees of their quality”. \n
- . At the XI Summit of the Heads of State and Government of the Group of Fifteen (G-15), in Jakarta (30-31 May 2001), the Heads of State and Government stressed the “urgent need to address pandemic and endemic diseases such as HIV/AIDS, Tuberculosis and Malaria” and stated that “the implementation of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) should in no way prevent developing countries from taking measures, such as compulsory licensing and parallel imports to ensure access to life-saving drugs at affordable prices to overcome hazards to public health and nutrition caused by HIV/AIDS and other diseases”. They also considered “the forthcoming Special Discussion in the Council for TRIPS of the WTO as an opportunity for promoting a convergence of views in this regard”. \n
- Finally, in civil society, a number of important non-governmental organizations, such as “Médecins Sans Frontières”, Oxfam and Consumers International also have emphasized their concern that the TRIPS Agreement may be applied in detriment to health policies. \n
\n TRIPs and public health\n
\n- \n
- There are different elements that relate the TRIPS Agreement to public health issues. In particular, provisions related to patents on pharmaceutical products have an obvious effect on national policies on access to medications. In the Preamble of the TRIPS Agreement, Members recognize “the underlying public policy objectives of national systems for the protection of intellectual property, including developmental and technological objectives”. They also recognize “the special needs of the least-developed country Members in respect of maximum flexibility in the domestic implementation of laws and regulations in order to enable them to create a sound and viable technological base. In this context, patent rights cannot be paramount to overarching public policies, in particular health policies”. Whenever governments deem it appropriate, a number of the provisions of the TRIPS Agreement can be applied in order to ensure access to medications. \n
- Adequate access to medications at affordable prices is recognized as one of the most effective elements of public health policies to reduce mortality and infection rates. In the case of HIV/AIDS, for instance, some of the most successful policies have been possible through provision of increased access to generic and patented medicines to those in need. Access can be limited by a number of factors, such as financial hurdles; physical and infrastructure barriers; and information gaps, among others. When IPRs are properly granted and exercised, they may meet their objective of contributing to the development of new medicines. However, there should be a common understanding that confirms the right of governments to ensure access to medications at affordable prices and to make use of the provisions in the Agreement whenever the scope or exercise of IPRs result in barriers to access to medicines. \n
\n Objectives and Principles of the TRIPS Agreement\n
\n- \n\n
- Article 7 is a key provision that defines the objectives of the TRIPS Agreement. It clearly establishes that the protection and enforcement of intellectual property rights do not exist in a vacuum. They are supposed to benefit society as a whole and do not aim at the mere protection of private rights. Some of the elements in Article 7 are particularly relevant, in order to ensure that the provisions of the TRIPS Agreement do not conflict with health policies: the promotion of technological innovation and the transfer and dissemination of technology; the mutual advantage of producers and users of technological knowledge; social and economic welfare; and the balance of rights and obligations. \n
- Article 7 states that the protection and enforcement of intellectual property rights “should” contribute to the aforementioned objectives. Such language stems from a recognition by Members that the mere existence and the exercise of IPRs, such as patents, do not necessarily result in the fulfilment of the objectives of the Agreement. In the context of health policies, for instance, patent rights should be exercised coherently with the objectives of mutual advantage of patent holders and the users of patented medicines, in a manner conducive to social and economic welfare and to a balance of rights and obligations. Where confronted with specific situations where the patent rights over medicines are not exercised in a way that meets the objectives of Article 7, Members may take measures to ensure that they will be achieved – such as the granting of compulsory licences. \n
- The objective of the promotion of technological innovation and the transfer and dissemination of technology places the protection and enforcement of IPRs in the context of the interests of society. Such an objective is essential for the promotion of health policies, as it encourages the development of domestic production of pharmaceutical products. Whenever economically feasible, local production of pharmaceutical products is extremely important to ensure that medications are more readily available in the market, and at more affordable prices. Local manufacturing of pharmaceutical products also encourages sustainable access to medications by insulating the price of patented medicines against currency devaluations, as well as supporting the development of local expertise, which is vital in addressing local needs. As mentioned above, these objectives can be obtained by the normal exercise of patent rights. Where the patent holder fails to meet the objectives of the TRIPS Agreement and of public health policies, however, Members may take measures to ensure transfer and dissemination of technology to provide better access to pharmaceuticals. \n
- Also regarding patent protection of pharmaceutical products, the concept of “balance of rights and obligations” and of “mutual advantage of producers and users of technological knowledge” are relevant to ensure that the exercise of the exclusive rights provided by patent rights is subject to limitations, which are expressed in different provisions of the TRIPS Agreement, such as those relating to compulsory licences and parallel imports. \n
- In Article 8, the TRIPS Agreement affirms that Members may adopt measures to protect public health, among other overarching public policy objectives, such as nutrition and socio-economic and technological development. Any interpretation of the provisions of the Agreement should take into account the principles set forth in Article 8. The reading of such provision should confirm that nothing in the TRIPS Agreement will prevent Members from adopting measures to protect public health, as well as from pursuing the overarching policies defined in Article 8. \n
- Article 8.2 allows Members to take measures to prevent the abuse of intellectual property rights by right holders or the resort to practices which unreasonably restrain trade or adversely affect the international transfer of technology. In the implementation of public health objectives, one situation of abuse of rights could be, for instance, the practice of excessively high prices of patented pharmaceutical products. Under normal circumstances, the exercise of patent rights can encourage the creation of new drugs and promote sustainable availability to society, as part of the “balance of interests” foreseen in the objectives of Article 7. Nevertheless, in many instances, the owners of patented pharmaceutical products may abuse their exclusive rights, by selling or offering for sale drugs at prices beyond reasonable margins of profit, which prevents adequate access to medications by the general public. Another situation of abuse of rights could occur when the owners of patented pharmaceutical products do not offer their products in sufficient amounts to meet the demands of the market. In such non-exhaustive situations, patent rights are exercised in a way that conflicts with public health policies as they prevent adequate access to medicines. \n
Each provision of the TRIPS Agreement should be read in light of the objectives and principles set forth in Articles 7 and 8. Such an interpretation finds support in the Vienna Convention on the Law of Treaties (concluded in Vienna in 23 May 1969), which establishes, in Article 31, that “[a] treaty shall be interpreted in good faith in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in the light of its object and purpose”.\n
\n Objectives and Principles of the TRIPS Agreement\n
\n- \n\n
- Whenever governments deem it appropriate, adoption of the principle of international exhaustion of rights can be a useful tool for health policies. Where the prices of pharmaceutical products are lower in a foreign market, for instance, a government may decide to allow importation of such products into the national market, so as to allow offer of drugs at more affordable prices. Such measures may be beneficial to prevent anti-competitive practices on behalf of patent owners who offer their patented products at unreasonably high prices in the domestic market. In this case, patent owners would compete with other legitimate products: given that their exclusive rights would be exhausted, the interests of the patent owner would not be damaged. \n
- For developing countries, in particular, least-developed countries and smaller economies, “parallel importation” can be a significant way of increasing access to medications, where the prices charged by patent holders for their products are unaffordable. Moreover, in situations where the local manufacture of the product is not feasible, and therefore compulsory licences may be ineffective, parallel importation may be a relevant tool to ensure access to drugs. \n
- In light of the importance of Article 6 as an instrument for health policies, we consider that Article 6 should be implemented in such a way as to ensure the broadest flexibility for Members to resort to parallel imports. Members should therefore confirm their right of applying regimes of exhaustion of rights in their jurisdiction. \n
Article 6 of the TRIPS Agreement is extremely relevant for Members, especially developing countries, and particularly the least-developed and smaller economies among them. Article 6 provides that Members are free to incorporate the principle of international exhaustion of rights in national legislation. Consequently, any Member can determine the extent to which the principle of exhaustion of rights is applied in its own jurisdiction, without breaching any obligation under the TRIPS Agreement.\n
\n Compulsory Licences\n
\n- \n
- Compulsory licences are important instruments to protect public health. Obviously, compulsory licences alone will not address all the problems related to public health, as other structural factors can also contribute to limiting access to pharmaceuticals. The TRIPS Council, however, is called to consider the extent to which intellectual property rights, on particular patents, may impose a barrier to access to medicines. Members should take the view that the TRIPS Agreement in no way stands in the way of public health protection, and therefore that it should provide the broadest flexibility for the use of compulsory licences. \n
- Empirical evidence demonstrates that many Members have extensive experience in resorting to compulsory licences, without damaging the patent protection system. Some developed countries, for instance, are not only among of the main users of the patent system, but also seem to be great users of compulsory licences. The national legislation of several Members also provides for compulsory licences on different grounds, such as refusal to deal, failure to work, public interest, inadequate supply and health. \n
- Compulsory licences can represent a significant tool for governments to ensure access to pharmaceuticals. Normally, patent owners are expected to provide access of their patented medicines to the market. In specific circumstances, however, governments may deem it necessary to grant compulsory licences to allow interested third persons to produce the medicine, in order to ensure that it will be more readily available, or more affordable to the general public. \n
- Some of the most relevant provisions of the TRIPS Agreement with respect to compulsory licences are Articles 31, 7, 8 and 40 of the TRIPS Agreement and Article 5 of the Paris Convention. When read together, such provisions allow scope for Members to ensure that regulatory policies can be exercised by governments to promote public health policies. Based on Article 5A of the Paris Convention and Article 31 of the TRIPS Agreement, governments may issue compulsory licences as a way of ensuring that medicines will be available at more affordable prices. \n
- Clearly, Article 31 of the TRIPS Agreement does not define the grounds upon which to issue compulsory licences, but merely establishes procedural requirements to be followed by Members. Therefore, Members are free to determine the grounds upon which to issue compulsory licences. \n
- As regards the relationship of the provisions related to compulsory licenses with Articles 27.1 and 28 of the TRIPS Agreement, we believe that both set of provisions address different matters and circumstances. In no way Articles 27.1 and 28 limit the right of Members to issue compulsory licences. \n
- In many cases, developing countries – particularly least-developed countries and smaller economies – have limited industrial capacities and very small domestic market to manufacture medicines locally in order to ensure adequate access to drugs. In this regard, it should be noted that nothing in the TRIPS Agreement prevents Members from granting compulsory licences for foreign suppliers to provide medicines in the domestic market. In addition, Members may adopt regimes of international exhaustion of rights in national legislation to allow parallel imports into the domestic market. In this respect, the reading of Article 31(f) should confirm that nothing in the TRIPS Agreement will prevent Members to grant compulsory licences to supply foreign markets. \n
\n Differential Pricing\n
\n- \n
- Given that differential pricing (or tiered pricing) is not an intellectual property issue, we believe that it should not be covered by the TRIPS Agreement, although Members might be interested in following the development of discussions in other competent international fora, such as the World Health Organization. \n
- We believe that differential pricing arrangements can play a relevant role in providing better access to affordable medicines. Governments should also consider the establishment of global data bases on drug prices, which would facilitate decisions by governments related to the establishment of price controls, authorization of parallel imports and granting of compulsory licences. \n
- In no way should discussions on differential pricing be prejudicial to the right of Members to make use of the provisions of the TRIPS Agreement, such as parallel imports and compulsory licences. \n
\n Other Issues\n
\n- \n
- Nature and scope of obligations in the TRIPS Agreement (Article 1.1): Article 1.1 is important to ensure the freedom of governments on the means of implementation of the minimum standards of the TRIPS Agreement in national legislation. In many cases, more extensive protection in national legislation than is required by the TRIPS Agreement may result in limitations for the implementation of health policies. We consider that Members should be free to implement the TRIPS Agreement in ways that best accommodate the protection of health policies in national legislation. \n
- Protection of Test Data (Article 39.3 of the TRIPS Agreement): Article 39.3 of the TRIPS Agreement leaves considerable room for Member countries to implement the obligation to protect test data against unfair competition practices. The Agreement provides that “undisclosed information” is regulated under the discipline of unfair competition, as contained in Article 10bis of the Paris Convention. With this provision, the Agreement clearly avoids the treatment of undisclosed information as a “property” and does not require granting “exclusive” rights to the owner of the data. \n
- The TRIPS Agreement requires Members to grant this protection only in respect of new chemical entities. There is no need to provide it for a new dosage form or for new use of a known product. The protection is to be granted against “unfair commercial use” of confidential data. This means that a third party could be prevented from using the results of the test undertaken by another company as background for an independent submission for marketing approval, if the data had been acquired through dishonest commercial practices. However, Article 39.3 does permit a national competent authority to rely on data in its possession to assess a second and further applications, relating to the same drug, since this would not imply any “unfair commercial use”. \n
- Transitional arrangements (Articles 65.4 and 66.1 of the TRIPS Agreement): The TRIPS Council could consider extending the transitional periods foreseen in Article 65.4 and 66.1 of the TRIPS Agreement. \n
- Non-violation (Article 64.3 of the TRIPS Agreement): There is no consensus on the scope of non-violation complaints made pursuant to the TRIPS Agreement. It seems inconceivable that a non-violation complaint could be applied to measures to protect public health, in particular measures for providing access to essential medicines.